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Credit & Collections Kit For Dummies® by Aaron Larson, Steven A. Harms

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Chapter 4

Establishing Good Billing Practices to Avoid Collection Headaches

In This Chapter

Getting prompt payment through effective billing practices

Keeping your billing practices organized

Training employees on billing procedures

One of the tricks of a good salesperson is to keep a steady flow of business cards, brochures, and sales materials of all sizes and shapes in front of the customer. The idea is that if you constantly remind your customers that you’re ready to provide the best products and services, they simply can’t forget about you. Well, the same theory applies to good billing practices: To facilitate timely payment and avoid collection headaches, provide prompt and accurate invoices, statements of account, credit memos, debit memos, and reminder notices to your customers.

Customers come in all sizes, shapes, and personalities. Billing practices should respect those differences and be flexible, giving a gentle nudge to customers who may have just misplaced a bill, but taking a more aggressive approach with customers who intentionally fail to pay their bills. An effective billing system respects the delicate balance between keeping pressure on a customer for prompt payment while, at the same time, maintaining a good business relationship and not jeopardizing future sales. To put it more simply, your system must distinguish between good pay customers and bad pay customers.

If your customer ignores the first invoice, sending a statement of account serves as a reminder. ...

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